Reply Brief — Sprenger, Olson & Shutes, P. A. v. Burlington Northern Railroad

> Supreme Court, U.S,

No. 86-1880 AUG 3 Bey

ANIOL, JR,

CLERK

Is Tue

Supreme Court of the Gnited States

Ocroser Term, 1986

SPRENGER, OLSON & SHUTES, P.A.

and DAVIS, MINER, BARNHILL & GALLAND,

Petitioners,

Vv.

BURLINGTON NORTHERN RAILROAD COMPANY,

Respondent.

On Petition For Writ Of Certiorari To The United

States Court Of Appeals For The Seventh Circuit

PETITIONERS’ REPLY BRIEF

Lee A. FREEMAN, JR.*

James T. Matysiak

AvBERT F. Ertrincer

Attorneys for Petitioners

Of Counsel:

FREEMAN, Freeman & Sauzman, P.C.

401 North Michigan Avenue

Suite 2700

Chicago, Illinois 60611

(312) 222-5100

® Counsel of Record

Midwest Law Printing Co., Chicago 60611, (312) 321-0220

TABLE OF CONTENTS

PETITIONERS’ REPLY BRIEF .............

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TABLE OF AUTHORITIES

Aronson v. Board of Trade, 372 phescnial 1349 (N.D.

od ar aa teks aa aneceeeaduwes

EEOC v. Burlington Northern, Inc., 618 F.Supp.

as Teds 04 c45 ake CkREA Nee US 40 Eo

In re Cenco Securities Litigation, 519 F.Supp. 322

Pe A I SS ide ca cki den ven take aae

In re Corrugated Container, 1983-2 Trade Cases

SE EE, a ED vbw ho kA beac csees

Keith v. Volpe, 501 F.Supp. 403 (C.D. Cal. 1980) .

Municipal Authority of Bloomsburg v. Pennsyl-

vania, 527 F.Supp. 982 (M.D. Pa. 1982) ....

Pacific Plumbing Supply Co. v. Crane Co., 1982-1

Trade Cases ¢ 64,473 (W.D. Wash. 1982) ...

Pennsylvania v. Delaware Valley Citizens Coun-

cil For Clean Air, 55 U.S.L.W. 5113 (June 13,

a hr Ak Se UR a ohn ba SES o 0d wees

Rajender v. University of Minnesota, 546 F.Supp.

Se I EE oe cic b eve dedbateuvwe ce

Vacchione v. Wohlgemuth, 481 F.Supp. 776 (E.D.

PU EE Ce CaN coke sede ceveccestseaduarens

In Tue

Supreme Court of the Anited States

Ocroser Term, 1986

SPRENGER, OLSON & SHUTES, P.A.

and DAVIS, MINER, BARNHILL & GALLAND,

Petitioners,

v.

BURLINGTON NORTHERN RAILROAD COMPANY,

Respondent.

On Petition For Writ Of Certiorari To The United

States Court Of Appeals For The Seventh Circuit

PETITIONERS’ REPLY BRIEF

With the exception of one statement by Burlington North-

ern (““BN’’), all of the matters discussed in BN’s Brief

in Opposition to the Petition for Certiorari have been fully

treated in the Supplement to Petition for Writ of Cer-

tiorari. The one matter not addressed in the Supplement

is BN’s misleading implication that it introduced evidence

in the district court on the issue of whether a fee enhance-

ment to compensate for risk was necessary to attract com-

petent counsel to take this case. (BN Opp. 11)

It is false for BN to suggest that it introduced any evi-

dence to refute petitioners’ showing that plaintiffs could

not obtain competent counsel “‘in the market” without the

2

prospect of an enhanced fee. Not only did BN fail to in-

troduce any evidence of its own, BN did not challenge

the evidence presented by petitioners. There was simply

no conflicting evidence on this point for the lower courts

to assess, and petitioners are not urging this Court to

review any factual finding that was supported by any evi-

dence in the record.

The uncontroverted evidence offered by petitioners in-

cluded the testimony of leading civil rights lawyers and

economic experts who stated that without tae availability

of sufficient risk enhancement of fees, this case would not

have been brought. The affidavits of Professor (now Judge)

Frank Easterbrook, Julius Chambers, John E. Jacob, Bruce

Elfvin, and Barrington D. Parker, Jr., which were intro-

duced into evidence by petitioners at the fee hearing,

stood uncontradicted by BN.? Thomas Sullivan and Pro-

fessor Herbert Hill testified in detail at the fees hearing

from their own experience in civil rights litigation to the

necessity of fee enhancements to secure counsel for a case

like this one. (Transcript of Proceedings 76-83, 94-97, 106-

07) Neither witness was even cross-examined by BN on

this subject.

BN presented nothing to rebut petitioners’ economic evi-

dence on the need for a fee enhancement. Indeed, BN chose

not to use its own economic expert, Professor Steven

1 BN represents (BN Opp. 8-n. 12) that it offered substantial re-

butting evidence below which is summarized at py. 26-37 of its

appellate brief. The pages cited contain only conclusory references

to the strong evidence of discrimination uncovered by petitioners,

EEOC’s presence in the case, and the supposedly significant chance

of settlement in a case fought to the day of trial.

2 BN conducted extensive discovery with respect to petitioners’

fee request, including the depositions of Professor Easterbrook,

Thomas Sullivan, Bruce Elfvin, and Professor Hill.

=

Shavell, because he agreed with Professor Easterbrook

that enhanced fees are essential if the civil rights laws

are to be enforced through private litigation. Ironically,

petitioners—over BN’s objection that such economic evi-

dence was irrelevant (Transcript of Proceedings 353-355)—

introduced Professor Shavell’s deposition testimony at the

fee hearing to corroborate the Easterbrook testimony.

The only circumstance cited by the district court for

its feeling that risk enhancement of fees was not neces-

sary to attract competent counsel was the fact that cer-

tain other attorneys had brought individual Title VII ac-

tions against BN around the time this case was brought.*

This ‘“finding’”’ by the district court is the only thing in

the record BN can now cite to uphold the decisions of

the lower courts. (BN Opp. 11)

The fact, however, that other attorneys filed complaints

against BN proves absolutely nothing, for three reasons.

First, the other actions were brought for individual em-

ployees and involved none of the problems or risks associ-

ated with representation of the broad classes for which

petitioners sought relief. Second, as BN itself brought out

below, the evidence was uncontroverted that these tag-

along counsel simply rode in petitioners’ wake and con-

tributed nothing—neither legal services nor costs—toward

prosecution of the case.* Finally, at the time these cases

3 The district court also relied upon its belief, which was not sup-

ported by any evidence offered at the hearing, that the history

of the struggle for equality demonstrates that attorneys will come

forward to represent plaintiffs in civil rights cases without fee

enhancement. BN’s Opposition does not even attempt to support

this ground for rejecting petitioners’ showing.

4 Burlington Northern’s Preliminary Response to the Fees and

Expense Petition of: Jarve Garrett and Fishman Legal Services,

filed July 13, 1984, p. 20.

aiilias

were brought against BN in 1978, the law strongly sup-

ported risk multipliers, very large multipliers were given

in a number of cases, and attorneys reasonably believed

they would be compensated for undertaking risk in con-

tingent cases if they won.5 Obviously, one cannot use the

behavior of attorneys who expected to be compensated

for risk to show that attorneys would have brought this

case even if it was clear that no fee enhancement for risk

would be available.

CONCLUSION

————

BN attempts to minimize the factors in this case that

compel some fee enhancement under the standards set in

Pennsylvania v. Delaware Valley Citizens Council For

Clean Air, 55 U.S.L.W. 5113 (June 18, 1987). But BN can

point to no evidence in the record contrary to petitioners’

showing that plaintiffs would have faced insuperable diffi-

culties in finding competent counsel in the relevant market

5 Examples of cases giving high multipliers in the period in which

these cases were filed are: Vacchione v. Wohlgemuth, 481 F.Supp.

776 (E.D. Pa. 1979) (multiplier of 2.0 in civil rights case); Aron-

son v. Board of Trade, 372 F.Supp. 1349 (N.D. Ill. 1974) (multiplier

of 4.0). Courts continued to grant substantial multipliers in the

1980s. See, e.g., In re Corrugated Container, 1983-2 Trade Cases

q 69,628 (S.D. Tex. 1983) ag gc of 3.5 and 4.0); Rajender v.

University of Minnesota, 546 F.Supp. 158 (D. Minn. 1982) (multi-

ed of 3.0 in Title VII case); Municipal Authority of Blooms-

rg v. Pennsylvania, 527 oom a 982 (M.D. Pa. 1982) (multiplier

of 4.5); Pacific Plumbing Suppey Co. v. Crane Co., 1982-1 Trade

Cases 4 64,473 (W.D. Wash. 1982) (multiplier of 3.0); Jn re Cenco

Securities Litigation, 519 F.Supp. 322, 327 (N.D. Ill. 1981) (multi-

plier of 4.0 awarded to lead counsel); Keith v. Volpe, 501 F.Supp.

403 (C.D. Cal. 1980) (multiplier of 3.0 in civil rights case).

=

without the expectation that a fee enhancement would be

paid to compensate for risk. The unequivocal and uncon-

tradicted testimony of the witnesses called by petitioners

on this point was reinforced by the following critical facts

that BN cannot dispute:

(i) Petitioners were completely dependent on winning

the case to receive any fee and reimbursement of $1 million

in expenses.

(ii) Petitioners could not in this class action make any

arrangements with their clients that. would compensate

them for undertaking risk.

(iii) This was a very risky case.

(iv) Petitioners were granted no fee enhancement to

compensate for risk. Instead they were paid only the

hourly rates which are “paid to comparable attorneys in

the relevant community” for non-contingent, risk-free legal

work. EEOC v. Burlington Northern, Inc., 618 F.Supp.

1046, 1055.

‘In light of this Court’s decision in Delaware Valley, and

the failure of the lower courts to analyze the issue of com-

pensation under the proper standards, petitioners respect-

fully request that the Petition be granted and the deci-

sion of the Seventh Circuit be reversed.

Respectfully submitted,

LEE A. FREEMAN, JR.*

JAMES T. MALYSIAK

ALBERT F. ETTINGER

Attorneys for Petitioners

Of Counsel:

FREEMAN, FREEMAN & SALZMAN, P.C.

Dated: August 3, 1987 * Counsel of Record